Some gift cards come with surprise fees

WEST PALM BEACH — Gift cards are expected to be more popular than ever this holiday season, with 80 percent of shoppers planning to buy one, a National Retail Federation survey found. But not all gift cards are created equal, warns Bankrate.com credit card analyst Janna Herron.

General-purpose cards from American Express, Visa, Discover and MasterCard carry purchase fees that you might not notice in the holiday rush. These cards have the logo of a payment card network and can be used wherever that network is accepted.

"While really convenient for the person who you are giving it to, you will have to pay a purchase fee up-front of $3.95 to $6.95," Herron said.

That's not true of most brand-specific cards for a particular retailer such as a department store, specialty store, restaurant, gas station or airline. Few of those have purchase fees.

Bankrate's research into 62 different gift cards turned up just three specific cards that carried a purchase fee: Staples, Toys "R" Us and Chevron/Texaco.

"The other thing we found is that none of the brand-specific cards expire and they do not charge an inactivity fee," Herron said.

Federal law requires that money on a gift card cannot expire for at least five years.

People like giving gift cards because it's quick and easy, and there are no worries about size or color. Another plus with gift cards is that there is protection against theft or a lost card. Keep your receipt so the purchase can be verified.

Whatever you do, put the gift card in your wallet so you won't forget to use it. Americans have billions of dollars of unused gift cards forgotten in junk drawers or elsewhere. Some estimates have placed the unused cards as high as $300 per household.

Here are additional findings from the Bankrate survey of 1,001 adults conducted by Princeton Survey Research Associates:

• Almost two in three Americans have given a gift card, and more than three in four have received one.

• The most common value of gift cards is between $25 and $50.

• As income level increases, Americans are more likely to give and receive gift cards.

• 56 percent can be delivered electronically, in line with each of the past two years.

• 69 percent of gift card issuers will replace the card and/or funds in the event of loss or theft.

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